New power tariffs take effect as Umeme exits
Left to right: ERA Board chairperson Sarah Wasagali Kanaabi, Energy Minister Ruth Nankabirwa, and ERA CEO Ziria Waako address journalists in Kampala on March 31, 2025. PHOTO | ISAAC KASAMANI
What you need to know:
- The end-user tariffs will be charged by UEDCL for the supply of electricity from April to June 2025.
The Electricity Regulatory Authority (ERA) yesterday announced the change in power tariffs as Umeme handed over its operations to the Uganda Electricity Distribution Company Limited (UEDCL).
The ERA board chairperson, Dr Sarah Wasagali Kanaabi, announced that they have approved the electricity end-user tariffs to be charged by UEDCL for the supply of electricity from April to June 2025.
Dr Wasagali said the end-user tariffs updated quarterly follow a thorough review of the application along with the public feedback received during the publication period.
“The lifeline tariff will be Shs250 per unit for qualifying domestic customers who consume up to only 100 units; so, beyond 100 units, you don’t qualify for lifeline tariffs,” Dr Wasagali said at ERA offices in Kampala. “Number Two is the domestic tariff, which is the cost-reflective tariff, which will be Shs756.2 per unit for other domestic consumers beyond the first 15 units,” she added
The commercial tariff will be Shs546.4 per unit, medium industrial tariff Shs355.1 per unit and manufacturing Shs412.5 per unit.
“Block One of the large industrial customer tariffs will have to pay Shs300.4 per unit; Block Two, which is a declining block tariff, will be Shs282.9 per units, while for the large consumer tariffs, the services will be Shs348.7,” Dr Wasagali explained.
Industrial tariffs
According to Dr Wasagali, the extra-large industrial tariffs will be Shs203.6 per unit, public amenities tariff (hospitals, universities and so on) will be Shs360 per unit. However, all other charges, including connection, remain unchanged.
She, however, explained that there will be continued implementation of the domestic cooking tariff of Shs412 per unit to encourage domestic consumers to cook using electricity between the 81st and the 150th unit of electricity consumed monthly. In arriving at the aforementioned end-user tariffs, Dr Wasagali said they considered several factors, including demand, which they expect to grow at an annual rate of 10.4 percent in 2025.
Other assumptions are that the quarterly tariff adjustment methodology implemented by ERA since 2014 and the subsequent years, which adjusts the annual base tariff for changes in inflation, exchange rate, international fuel prices, and other costs approved by the ERA, will continue to be implemented in the year 2025. Also, the UEDCL tariff performance targets for 2025, following the licence for sale and distribution of electricity issued to them, will continue to hold.
“The next assumption is that ERA will continue the implementation of measures to reduce the electricity end-user tariffs for manufacturers pegged on pre-determined demand growth targets for the year 2025,” she said.
Dr Wasagali said ERA will continue to review the implementation of the public amenities customer category such as street lighting, hospitals, and cooking for institutions. “We shall continue to review the composition of the medium and large industrial customer categories to provide separate customer categories for electricity consumers involved in manufacturing compared to those who are providing services,” she said.
Dr Wasagali further explained that the ERA will continue the implementation of the declining block tariff structure for large industrial manufacturing customers for the tariff year 2025.
“There will also be cessation of the block tariff structure for the extra-large industrial manufacturing category effective midnight on Monday.”
Mr Julius Wandera, the director of communications at ERA, said the reduction in the price of electricity is driven by the behaviour of macroeconomic factors such as exchange rates, inflation, and the global price of fuel.
“As you know, Umeme’s investments have previously been a significant factor in driving up tariffs. With their exit, tariffs are expected to gradually decrease, with the initial benefits going to extra-large manufacturers,” Mr Wandera said.
He added: “Our goal has been for manufacturers to receive a tariff of 0.5 US cents per unit, which has now been achieved with the new tariffs that UEDCL is implementing.”
